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EXHIBIT 10.42
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of March 21, 1997, between Ticketmaster Group,
Inc., an Illinois Corporation (the "Company"), and Xxxx Xxxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, the Company is desirous of employing Executive, and Executive
is desirous of being employed by the Company, on the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby mutually acknowledged, the parties
hereto agree as follows:
1. DEFINITIONS. The following terms shall have the indicated
meanings when used in this Agreement, unless the context requires otherwise:
(a) "BASE SALARY AMOUNT" shall mean $525,000 during the
first Contract Year, $550,000 during the second Contract Year,
$575,000 during the third Contract Year, $575,000 during the fourth
Contract Year and $600,000 during the fifth Contract Year.
(b) "BENEFIT PLAN" shall mean each vacation pay, sick
pay, retirement, welfare, medical, dental, disability, life insurance,
director/officer insurance, deferred compensation, profit sharing,
incentive compensation, stock award, stock option, stock appreciation
right or other employee benefit plan, program or arrangement, if any.
(c) "BOARD OF DIRECTORS" shall mean the Board of
Directors of the Company.
(d) "CAUSE" shall have the meaning ascribed to that term
in Section 7.
(e) "CONTRACT YEAR" shall mean each year during the term
hereof commencing February 1 and ending on the immediately following
January 31, except that the first Contract Year shall commence on
March 24, 1997 and end on January 31, 1998.
(f) "CUSTOMER" shall have the meaning ascribed to that
term in Section 9(c).
(g) "DISABILITY" shall have the meaning ascribed to that
term in Section 6(a).
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(h) "DISABILITY PERIOD" shall have the meaning ascribed
to that term in Section 6(a).
(i) "PROPRIETARY INFORMATION OF THE COMPANY" shall have
the meaning ascribed to that term in Section 10.
(j) "TICKETMASTER BUSINESSES" shall have the meaning
ascribed to that term in Section 9(b).
2. EMPLOYMENT. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, on the terms and subject
to the conditions set forth herein. Executive hereby represents and warrants
to the Company that the execution and performance of this Agreement by him will
not conflict with, violate or breach any other agreement, written or oral, to
which he may be or may have been a party, including, without limitation, any
employment agreement or consulting agreement, and that he is otherwise under no
duty or obligation to any third party that would restrict his ability to fully
perform this Agreement.
3. TERM OF EMPLOYMENT. The term of employment hereunder shall
commence on March 24, 1997 and end on January 31, 2002, subject to early
termination as herein provided.
4. POSITION AND DUTIES. Executive shall serve as a Senior
Executive Vice President of the Company and the President and Chief Operating
Officer of Ticketmaster Direct, Inc., a wholly-owned subsidiary of the Company
("Direct"). In his capacities as such officers of the Company and Direct,
Executive shall report directly to the Chief Executive Officer and the Board of
Directors of the Company and Direct, respectively. Subject to the authority of
the Board of Directors and the Chief Executive Officer of the Company and
Direct, respectively, the Executive shall have (i) responsibility for database
marketing, direct marketing and telemarketing (inbound and outbound), which
shall include, without limitation, music-on-hold, direct mail, list management,
entertainment-to-go, and licensing and merchandising (club and catalog), and
(ii) such other powers and duties as may from time to time be prescribed by the
Board of Directors or the Chief Executive Officer of the Company. Executive
agrees to serve without further compensation, if elected or appointed thereto,
as an officer or a director of any of the Company's domestic and foreign
subsidiaries and affiliates. During Executive's employment by the Company, he
will be entitled to indemnification as an officer of the Company (and, if so
elected, as an officer or director of any of the Company's domestic and foreign
subsidiaries or affiliates) in the manner provided by the Illinois Business
Corporation Act of 1983, as amended, and the Company's Articles of
Incorporation and By-Laws, as amended. Executive's principal place of
employment will be at such offices as the Company may provide in the New York
City metropolitan area or such other place as Executive and Company
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mutually designate. Executive will travel as reasonably necessary for the
performance of his duties.
5. EXCLUSIVE DUTIES. During Executive's employment by the
Company and Direct, Executive shall devote his entire working time, attention
and energies to the business of the Company and will not take any actions of
the kind described in Sections 9(a), 9(b) and 9(c).
6. COMPENSATION AND OTHER BENEFITS.
(a) BASE SALARY. During each Contract Year of the term
hereof, the Company shall pay to Executive the Base Salary Amount.
The Base Salary Amount shall be paid to Executive in accordance with
the Company's regular payroll practices with respect to senior
management compensation, but in any event no less frequently then
monthly.
In the event that Executive shall become disabled as a result
of bodily injury or physical or mental illness (whether or not
occupational) to such extent that in the sole opinion of the Board of
Directors, based upon competent medical advice, he can no longer
perform the duties of Senior Executive Vice President of the Company
or President and Chief Operating Officer of Direct (a "Disability"),
the Company shall only be obligated to continue to pay the Base Salary
Amount to Executive for the 120-day period immediately following the
date of Disability (the "Disability Period"). The right to receive
salary payments during the Disability Period, if applicable, shall
survive any termination of employment by virtue of Disability pursuant
to Section 7.
(b) ANNUAL PERFORMANCE BONUSES. During each Contract
Year, the Company shall pay Executive an annual performance bonus as
determined by the Board of Directors or its Compensation Committee in
its sole discretion, the determination of which shall be based upon
such standards, guidelines and factual circumstances as the Board of
Directors or its Compensation Committee deems relevant, including,
without limitation, the operating results for the Company and Direct
during such Contract Year, the importance of the efforts of Executive
in achieving such operating results and the achievement by the Company
and/or Executive of performance goals previously established by the
Board of Directors or its Compensation Committee for such Contract
Year; provided, however, that in no event shall the bonus be less than
$125,000 for a full first contract Year (pro rated, however, based
upon a 365 day fiscal year, for the period from March 24, 1997 through
January 31, 1998), $125,000 for a full second Contract Year, $150,000
for a full third Contract Year, $150,000 for a full fourth Contract
Year and $175,000 for a full fifth Contract Year.
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(c) EXPENSES. Executive shall be entitled to receive
prompt reimbursement from the Company for all documented business
expenses incurred by him in the performance of his duties hereunder,
provided that Executive properly accounts therefor in accordance with
the Company's reimbursement policy, including, without limitation, the
submission of supporting evidence as reasonably requested by the
Company. While traveling on Company business, Executive shall be
entitled to transportation and accommodations consistent with his
position with the Company.
(d) FRINGE BENEFITS. During the term hereof, Executive
shall be entitled (i) to participate in and receive benefits under all
of the Benefit Plans which from time to time are made generally
available to senior management of the Company or Direct, (ii) to
participate in the Company's stock plan in such manner as may be
determined in the sole discretion of the Company's Board of Directors
or its Compensation Committee and (iii) to receive an automobile
allowance in the amount of $1,500 per month. To the extent not
covered by the Company's Benefit Plans, Executive shall be entitled to
reimbursement from the Company for all reasonable medical and health
expenses incurred by Executive for his benefit or for the benefit of
his dependents.
(e) INSURANCE. The Company agrees to maintain in effect
during the term hereof insurance on Executive's life payable to his
estate or his named beneficiary or beneficiaries in the amount of
$3,000,000; provided, however, that Executive shall reimburse the
Company for any and all premiums paid by the Company with respect to
such insurance in excess of the preferred or select premium rate for
non-smokers. In addition, so long as Executive is insurable at
standard insurable rates (which rates shall in no event increase
during any Contract Year by a percentage greater than the percentage
increase in the consumer price index for all urban workers (1967=100)
over the indexed figure for the immediately preceding Contract Year,
in each case measured as of the month of February), the Company agrees
to also maintain in effect during the term hereof (and without
subjecting Executive to any eligibility or waiting period) a
disability insurance policy with coverage substantially equivalent to
the coverage under the disability insurance policy now in effect with
respect to Executive.
(f) VACATIONS. During the term hereof, Executive shall
be entitled to sick leave and paid holidays consistent with the
Company's sick leave and holiday policy for senior management and up
to three weeks paid vacation during each Contract Year (or such other
vacation time as is consistent with the Company's policy for senior
management).
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7. TERMINATION. The Company or Executive may terminate the
employment of Executive hereunder upon the occurrence of a Disability (as
defined in Section 6(a)) for a period of no less than 120 days during any
consecutive twelve-month period. The Company may also terminate the employment
of Executive hereunder upon Executive's death or for Cause. For purposes
hereof, "Cause" shall mean (i) fraud, theft, misappropriation of funds or
conviction of a felony, (ii) Executive's engagement in illegal conduct tending
to place Executive or the Company in disrepute, (iii) dereliction or gross
misconduct in Executive's performance of his duties as an employee of the
Company or the failure of Executive to perform his duties in a manner
consistent with the instructions of the Board of Directors or the Chief
Executive Officer of the Company or (iv) violation by Executive of any of his
material covenants contained in this Agreement, including, without limitation,
Section 10. Notwithstanding the foregoing, before the Company may terminate
the employment of Executive for Cause, the Company shall deliver to Executive
not less than ten business days prior written notice of the Company's intention
to terminate Executive's employment together with a statement of the basis for
such termination, and Executive shall be afforded (i) an opportunity to respond
to the Company during such ten-business day period and (ii) in the event that
the basis for such termination is clause (iii) or (iv) above, an opportunity to
remedy the situation resulting in the Company's determination to terminate for
Cause so long as such situation is non-repetitive in nature. Upon the
termination of Executive's employment for any reason, Executive shall be
entitled to receive all compensation (including, without limitation, a pro rata
portion of the minimum annual performance bonus, unless such termination is for
Cause) for the then current Contract Year through the date of such termination
plus all accrued but unreimbursed expenses. In addition, upon the termination
of Executive's employment for any reason other than for or by virtue of Cause,
death, Disability or Executive's voluntary termination of employment, the
Company shall continue to be responsible for the payment of all Base Salary
Amount and minimum annual performance bonuses for the remainder of the term
hereof; provided, however, that Executive shall have a duty to mitigate
commencing on the first anniversary of the date of termination; and, further
provided that Executive shall perform his covenants, duties and obligations
under Sections 9(a), 9(b) and 9(c) during the remainder of the term hereof.
8. DEVELOPMENTAL RIGHTS. Executive agrees that any developments
by way of invention, design, copyright, trademark or other matters which may be
developed or perfected by him during the term hereof, and which relate to the
business of the Company or its subsidiaries or affiliates, shall be the
property of the Company without any interest therein by Executive, and he will,
at the request and expense of the Company, apply for and prosecute letters
patent thereon in the United States or in foreign countries if the Company so
requests, and will assign and transfer the same to the
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Company together with any letters patent, copyrights, trademarks and
applications therefor; provided, however, that the foregoing shall not apply to
an invention that Executive develops entirely on his own time without using the
Company's equipment, supplies, facilities or trade secret information except
for those inventions that either:
(a) relate at the time of conception or reduction to
practice of the invention to the Company's business, or actual or
demonstrably anticipated research or development of the Company; or
(b) result from any work performed by Executive for the
Company.
9. CONSULTING.
(a) COVENANT NOT TO COMPETE. During the term hereof and
for a period of two years thereafter, Executive shall not, without the
prior written consent of the Company, directly or indirectly engage in
or assist any activity which is the same as, similar to or competitive
with the Ticketmaster Businesses (other than on behalf of the Company
or any of its subsidiaries or affiliates) including, without
limitation, whether such engagement or assistance is as an officer,
director, proprietor, employee, partner, investor (other than as a
holder of less than 5% of the outstanding capital stock of a publicly
traded corporation), guarantor, consultant, advisor, agent, sales
representative or other participant, anywhere in the world that the
Company or any of its subsidiaries or affiliates has been engaged,
including, without limitation, the United States, Canada, Mexico,
England, Ireland, Scotland, Europe and Australia. Nothing herein
shall limit Executive's ability to own interests in or manage entities
which sell tickets as an incidental part of their primary businesses
(e.g. cable networks, on-line computer services, sport teams, arenas,
hotels, cruise lines, theatrical and movie productions and the like)
and which do not hold themselves out generally as competitors of the
Company and its subsidiaries and affiliates. The "Ticketmaster
Businesses" shall mean the computerized sale of tickets for sporting,
theatrical, cinematic, live theatrical, musical or any other events on
behalf of various venues and promoters through distribution channels
currently being utilized by the Company or any of its subsidiaries or
affiliates (as such term is defined in Rule 405 of Regulation C
promulgated under the Securities Act of 1933, as amended).
(b) SOLICITATION OF EMPLOYEES. During the term hereof
and for a period of two years thereafter, Executive shall not (i)
directly or indirectly induce or attempt to induce (regardless of who
initiates the contact) any person then
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employed (whether part-time or full-time) by the Company or any of its
subsidiaries or affiliates, whether as an officer, employee,
consultant, adviser or independent contractor, to leave the employ of
the Company or to cease providing or otherwise alter the services then
provided to the Company or to any of its subsidiaries or affiliates or
(ii) in any other manner seek to engage or employ any such person
(whether or not for compensation) as an officer, employee, consultant,
adviser or independent contractor in connection with the operation of
any business which is the same as or similar to any of the
Ticketmaster Businesses.
(c) NON-SOLICITATION OF CUSTOMERS. During the term
hereof and for a period of two years thereafter, Executive shall not
solicit any Customers of the Company or any of its subsidiaries or
affiliates or encourage (regardless of who initiates the contact) any
such Customers to use the facilities or services of any Competitor of
the Company or any of its subsidiaries or affiliates. "Customer"
shall mean any person who engages the Company or any of its
subsidiaries or affiliates to sell, on its behalf as agent, tickets to
the public.
10. CONFIDENTIALITY. Executive shall not at any time (during or
for a period of sixty (60) months after termination of employment) disclose
(except as may be required by law) or use, except in the pursuit of the
business of the Company or any of its subsidiaries or affiliates, any
Proprietary Information of the Company. "Proprietary Information of the
Company" means all information known or intended to be known only to employees
of the Company or any of its subsidiaries or affiliates in a confidential
relationship with the Company or any of its subsidiaries or affiliates relating
to technical matters pertaining to the business of the Company or any of its
subsidiaries or affiliates, but shall not include any information within the
public domain. Executive agrees not to remove any documents, records or other
information from the premises of the Company or any of its subsidiaries or
affiliates containing any such Proprietary Information, except in the pursuit
of the business of the Company or any of its subsidiaries or affiliates, and
acknowledges that such documents, records and other information are the
exclusive property of the Company or its subsidiaries or affiliates. Upon
termination of Executive's employment, Executive shall immediately return all
Proprietary Information of the Company and all copies thereof to the Company.
11. GENERAL PROVISIONS.
(a) EXPENSES. All costs and expenses incurred by either
of the parties in connection with this Agreement and any transactions
contemplated hereby shall be paid by that party.
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(b) NOTICES. All notices, demands and other
communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, by
cable, by telecopy, by telegram, by telex or by registered or
certified mail to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a
notice given in accordance with this Section 11(b)):
(i) If to the Company:
Ticketmaster Group, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
With a copy to:
Xxxx, Xxxxxx & Xxxxxxxxx
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx Gerber
Telecopy No.: (000) 000-0000
(ii) If to Executive:
Xxxx Xxxxxx
Ticketmaster-New York, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
(c) HEADINGS. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
(d) SUCCESSORS; BINDING AGREEMENT. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and
their respective heirs, devisees, legatees, executors, administrators,
successors and personal or legal representatives. If Executive is
domiciled in a community
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property state or a state that has adopted the Uniform Marital
Property Act or equivalent or if Executive is domiciled in a state
that grants to his spouse any other marital rights in Executive's
assets (including, without limitation, dower rights or a right to
elect against Executive's will or to claim a forced share of
Executive's estate), this Agreement shall also inure to the benefit
of, and shall also be binding upon, his spouse. If Executive should
die while any amounts would still be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to Executive's designee or, if there be no such designee, to
Executive's heirs, devisees, legatees or executors or administrators
of Executive's estate, as appropriate.
(e) SEVERABILITY. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under existing or future
laws effective during the term of this Agreement, such provisions
shall be fully severable, the Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had
never comprised a part of this Agreement, and the remaining provisions
of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such
illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement a provision as similar in
terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
(f) ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof and thereof and supersedes all prior agreements and
understandings, both written and oral, between the Company and
Executive with respect to the subject matter hereof and thereof.
(g) ASSIGNMENT. This Agreement and the rights and duties
hereunder are not assignable by Executive. This Agreement and the
rights and duties hereunder may not be assigned by the Company without
the express written consent of Executive (which consent may be granted
or withheld in the sole discretion of Executive), except that such
consent shall not be required in order for the Company to assign this
Agreement or the rights or duties hereunder to an affiliate (as such
term is defined in Section 9(a)) of the Company or to a third party in
connection with the merger or consolidation of the Company with, or
the sale of all or substantially all of the assets or business of the
Company to, that third party.
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(h) AMENDMENT; WAIVER. This Agreement may not be amended
or modified except by an instrument in writing signed by, or on behalf
of, the Company and Executive. Either party to this Agreement may (a)
extend the time for the performance of any of the obligations or other
acts of the other party or (b) waive compliance with any of the
agreements or conditions of the other party contained herein. Any
such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party to be bound thereby. Any
waiver of any term or condition shall not be construed as a waiver of
any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to assert any of its rights
hereunder shall not constitute a waiver of any such rights.
(i) GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Illinois,
applicable to contracts executed in and to be performed entirely
within that state.
(j) JURISDICTION AND VENUE. The parties hereto agree
that all actions or proceedings initiated by either party hereto and
arising directly or indirectly out of this Agreement which are brought
pursuant to judicial proceedings shall be litigated in a Federal or
state court located in the State of California. The parties hereto
expressly submit and consent in advance to such jurisdiction and agree
that service of summons and complaint or other process or papers may
be made by registered or certified mail addressed to the relevant
party at the address to which notices are to be sent pursuant to
Section 11(b) of this Agreement. The parties hereto waive any claim
that a Federal or state court located in the State of California is an
inconvenient forum or an improper forum based on lack of venue.
(k) EQUITABLE RELIEF. Executive acknowledges that the
covenants contained in Sections 9 and 10 are reasonable and necessary
to protect the legitimate interests of the Company, that in the
absence of such covenants the Company would not have entered into this
Agreement, that any breach or threatened breach of such covenants will
result in irreparable injury to the Company and that the remedy at law
for such breach or threatened breach would be inadequate.
Accordingly, the Executive agrees that the Company, in addition to any
other rights or remedies which it may have, shall be entitled to seek
such equitable and injunctive relief as may be available from any
court of competent jurisdiction to restrain the Executive from any
breach or threatened breach of such covenants.
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(l) ATTORNEYS' FEES. If any legal action or other
proceeding is brought for the enforcement of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys'
fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it may be entitled.
(m) COUNTERPARTS. This Agreement may be executed in one
or more counterparts, and by the parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original while all of which taken together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement as of the date and year first written above.
TICKETMASTER GROUP, INC.
By: /s/ XXXXXXX X. XXXXX, PRES.
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Title: President
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/s/ XXXX XXXXXX
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XXXX XXXXXX
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